Chipotle Mexican Grill, Inc (CMG: 145.50 +12.34 +9.27%) posted its second quarter 2010 results which topped the Zacks Consensus Estimate. This was buoyed by the higher traffic count and new restaurant openings.Quarterly earnings of $1.46 per share outpaced the Zacks Consensus Estimate of $1.39, and soared 32.7% from $1.10 in the prior-year quarter.
Chipotle said that revenues for the quarter rose 20.1% to $466.8 million driven by new restaurant openings and increase in comparable-store sales. The reported revenues also outperformed the Zacks Consensus Estimate of $452 million.
Comparable-store sales growth has been decelerating since second-quarter 2008 – when it increased 7.1% – although it remained positive, showing resilience in a sluggish environment. After reaching the lowest point of 1.7% in the second-quarter 2009, comps have been on the rise. Comparable-stores sales climbed 8.7% in the quarter under review, reflecting a sequential increase of 440 basis points.
Restaurant operating margin expanded 90 basis points to 26.9% driven by comparable-store sales growth and lower food and occupancy costs (as a percentage of total revenue).
During the quarter under review, Chipotle opened 25 restaurants, and currently operates 1,001 outlets.
Financial Position
The company ended the quarter with cash and cash equivalents of $202 million and shareholders’ equity of $750 million.
Outlook
For fiscal year 2010, management now expects mid to high single digit comparable-store sales growth, up from its previous guidance of mid-single digit growth.
Chipotle has remained largely unruffled by the recent economic slowdown. The company remains on course to opening 120 to 130 new restaurants in fiscal 2010, reflecting a growth of 12.6% to 13.6%. In fiscal 2009, Chipotle opened 121 new restaurants and closed 2 locations, reflecting a net growth of 14.2%.www.chipotle.com/
| Overall Summary: |  35%, Bullish 65%, Bearish | Trade Quality: | Upside 30%, Poor Downside 80%, V. Good |
| Analysts' Targets | |
| Barclays Capital | $134 |
| Equal-weight | |
| Tuesday, July 13, 2010 | |
| Argus Research | $170 |
| Buy | |
| Thursday, June 10, 2010 | |
| Keefe Bruyette & Woods | $150 |
| Buy | |
| Thursday, April 22, 2010 | |
| Stifel Nicolaus | $155 |
| Buy | |
| Thursday, April 22, 2010 | |
| Jesup & Lamont | $149 |
| Neutral | |
| Thursday, April 22, 2010 | |
| RBC Capital Markets | $115 |
| Sector Perform | |
| Friday, February 12, 2010 | |
| Deutsche Bank Securities | $108 |
| Hold | |
| Monday, January 11, 2010 | |
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